Niti Aayog Virmani promotes Chinese investment in Indian manufacturing
ECONOMY & POLICY

Niti Aayog Virmani promotes Chinese investment in Indian manufacturing

Arvind Virmani, a member of Niti Aayog, suggested that India should encourage Chinese firms to invest and manufacture goods locally rather than continuing to import them. His comments followed a pitch from the pre-budget Economic Survey on July 22, which proposed attracting foreign direct investment (FDI) from China to boost local manufacturing and enhance the export market.

Virmani explained that if India is going to import goods from China for the next decade or more, it would be more beneficial to have Chinese companies establish operations in India and produce these goods domestically. This strategy, he noted, would align with the broader economic trade-offs.

With the US and Europe moving away from sourcing directly from China, Virmani argued that having Chinese companies invest in India could help the country tap into these markets more effectively. The Economic Survey emphasised that focusing on FDI rather than solely relying on trade could be a promising approach for boosting India?s exports, similar to strategies used by East Asian economies.

China is currently India's largest trading partner, with bilateral trade amounting to $118.4 billion in the fiscal year 2023-24. However, India has seen minimal FDI from China, which holds only a 0.37% share of the total FDI inflow. Tensions between the two nations, particularly after the Galwan Valley clash in June 2020, have impacted their economic relations. Despite these tensions, trade has continued to grow, with India's exports to China rising by 8.7% to $16.67 billion last fiscal year, while imports increased to $101.7 billion, widening the trade deficit to $85 billion.

Virmani believes that focusing on Chinese investment could be more advantageous for India than relying on imports, helping the country to better integrate into global supply chains and reduce its trade deficit.

(ET)

Your next big infra connection is waiting at RAHSTA 2025 – Asia’s Biggest Roads & Highways Expo, Jio World Convention Centre, Mumbai. Don’t miss out!

Arvind Virmani, a member of Niti Aayog, suggested that India should encourage Chinese firms to invest and manufacture goods locally rather than continuing to import them. His comments followed a pitch from the pre-budget Economic Survey on July 22, which proposed attracting foreign direct investment (FDI) from China to boost local manufacturing and enhance the export market. Virmani explained that if India is going to import goods from China for the next decade or more, it would be more beneficial to have Chinese companies establish operations in India and produce these goods domestically. This strategy, he noted, would align with the broader economic trade-offs. With the US and Europe moving away from sourcing directly from China, Virmani argued that having Chinese companies invest in India could help the country tap into these markets more effectively. The Economic Survey emphasised that focusing on FDI rather than solely relying on trade could be a promising approach for boosting India?s exports, similar to strategies used by East Asian economies. China is currently India's largest trading partner, with bilateral trade amounting to $118.4 billion in the fiscal year 2023-24. However, India has seen minimal FDI from China, which holds only a 0.37% share of the total FDI inflow. Tensions between the two nations, particularly after the Galwan Valley clash in June 2020, have impacted their economic relations. Despite these tensions, trade has continued to grow, with India's exports to China rising by 8.7% to $16.67 billion last fiscal year, while imports increased to $101.7 billion, widening the trade deficit to $85 billion. Virmani believes that focusing on Chinese investment could be more advantageous for India than relying on imports, helping the country to better integrate into global supply chains and reduce its trade deficit. (ET)

Next Story
Infrastructure Transport

Indian Railways Marks New Milestone with 4.5 km Long ‘Rudrastra’ Trial

Indian Railways has successfully conducted the trial run of Asia’s longest freight train, named ‘Rudrastra’, achieving a new milestone in cargo transportation, as per news reports. The 4.5 km-long train began its trial from Ganjkhwaja railway station in Chandauli, Uttar Pradesh, and travelled to Garhwa in Jharkhand. Covering a distance of 209 km in 5 hours and 10 minutes, it maintained an average speed of 40.5 km per hour. The train was formed by combining three long-haul racks, with ..

Next Story
Infrastructure Energy

UltraTech Launches India’s First On-Site Hybrid RTC Renewable Energy Project

UltraTech Cement has operationalised a 7.5 MW round-the-clock (RTC) hybrid renewable energy project at its Sewagram Cement Works in Gujarat. The first-of-its-kind solution combines bifacial solar modules with trackers, wind energy and battery storage, co-located on-site, to ensure uninterrupted power for cement manufacturing without grid reliance. The project was executed in collaboration with clean energy solutions provider Gentari. Installed as a behind-the-meter system, it is the country..

Next Story
Infrastructure Transport

Patna Metro Trials Successful, Red Line Priority Corridor to Launch This Month

Patna is set to roll out its first metro rail service later this month, with successful trial runs conducted on the Red Line priority corridor, the Patna Metro Rail Corporation announced.On 7 September, a metro train completed a test run between the Patna depot and Bhootnath station. Officials said the trials involved rigorous checks of rolling stock fitness, overhead electrification (OHE), and track alignment and stability to ensure operational safety and performance.The corridor from the New Pataliputra Bus Terminal to Bhoothnath has been designated as the priority stretch and will be the fi..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?